zaterdag 31 mei 2014

We've arranged a global civilization in which most crucial elements profoundly depend on science and technology. We have also arranged things so that almost no one understands science and technology. This is a prescription for disaster. We might get away with it for a while, but sooner or later this combustible mixture of ignorance and power is going to blow up in our faces.

Carl Sagan. The Demon-Haunted World: Science as a Candle in the Dark. 1995

When we talk about the novel we have to consider the culture in which it operates. Everything in the culture argues against the novel, particularly the novel that tries to be equal to the complexities and excesses of the culture. This is why books such as JR and Harlot’s Ghost and Gravity’s Rainbow and The Public Burning are important—to name just four. They offer many pleasures without making concessions to the middle-range reader, and they absorb and incorporate the culture, instead of catering to it. And there’s the work of Robert Stone and Joan Didion, who are both writers of conscience and painstaking workers of the sentence and paragraph. I don’t want to list names because lists are a form of cultural hysteria, but I have to mention Blood Meridian for its beauty and its honor. These books and writers show us that the novel is still spacious enough and brave enough to encompass enormous areas of experience. We have a rich literature. But sometimes it’s a literature too ready to be neutralized, to be incorporated into the ambient noise. This is why we need the writer in opposition, the novelist who writes against power, who writes against the corporation or the state or the whole apparatus of assimilation. We’re all one beat away from becoming elevator music.

Adam Broomberg & Oliver Chanarin are artists living and working in London. Together they have had numerous international exhibitions including The Museum of Modern Art, Tate Galleries, Apexart, The Gwagnju Biennale, the Stedelijk Museum, the International Center of Photography, KW Institute for Contemporary Art, The Photographers Gallery and Mathaf Arab Museum of Modern Art. Broomberg & Chanarin are Visiting Fellows at the University of the Arts London. Their work is represented in major public and private collections including Tate Modern, The Museum of Modern Art, the Stedelijk Museum, Victoria and Albert Museum, Musee de l’Elysee, The International Center of Photography, and the Art Gallery of Ontario. In 2013 they were awarded the Deutsche Börse Photography Prize for War Primer 2, and most recently they were awarded the ICP Infinity Award 2014 for their publication, Holy Bible.

De Duitse schrijver en fotograafJörg Colberg interviewde Adam Broomberg en Oliver Chanarin. Hij vroeg ze: 'Important events such as wars or disasters need to be witnessed and documented or reported. How can this work, though, in a world where the news and media in general have become so heavily commercialized and where, I think as a consequence, the general trust in images in the news has been diminished?'

Broomberg en Chanarin:

The civilian journalist, anyone armed with a mobile phone is now a potential witness. Did you know that Associated Press now have more people scouring social media then they have professional photographers in the field looking for ‘evidence’? The playing field is now wide open, and hopefully with more and more people feeling the need to blow the whistle the more we’ll know about the dark workings of the state.

stands in the middle of the Negev desert. It is a ghost town whose history directly mirrors the story of the Palestinian conflict. To create this alternative universe, Palestinian architecture has been carefully scrutinized. Roads and alleyways have been constructed to mimic the layout of towns like Ramallah and Nablus. In one corner, the ground has been covered in sand, a reference to unpaved refugee camps like Jenin. Graffiti has been applied to the walls with obscure declarations in Arabic: ‘I love you Ruby’ and ‘Red ash, hot as blood.’ Burned-out vehicles line the streets.

It is difficult to pinpoint what it is about this place that is disturbing. Perhaps it's the combination of the vicariousness and the violence. It's as if the soldiers have entered the enemy's private domain while he's sleeping or out for lunch, sifting through all his private belongings with too much curiosity. It's a menacing intrusion into the intimate.

The military technique of 'worming' attests to this sense of intrusion. Worming refers to the Israeli military method of navigating urban areas by moving through walls, instead of along streets and alleyways where the soldiers are most vulnerable. This is achieved by the use of ultrasound devices which 'see through' the walls of houses. Once the soldiers have determined that a space is safe, they blast a hole through the walls, creating channels through bedrooms abd living rooms. Almost every wall in Chicago is punctured by a star-shaped hole, the stamp of a controlled explosion.

The clean lines and empty spaces make it simpler for the trainee soldiers as they navigate the streets and buildings, emptying cartridges into false walls.

Chicago is not based on a specific town but is a generic 'Arab' place, designed by the soldiers themselves, building on their intimate experience of the minutiae of Arab cities. This convention of using the name 'Arab,' rather than Palestinian, effectively obscures identity. It's a thread of denial that runs through much of Israeli discourse about relations with Palestine

De 'ontkenning' van De Ander, de onderdrukte, de vervolgde, de geminachte, degene wiens identiteit wordt ontkend. Opnieuw: 'This is why we need the writer in opposition, the novelist who writes against power, who writes against the corporation or the state or the whole apparatus of assimilation. We’re all one beat away from becoming elevator music.' De wereld van het plat gedraaide, zielloze cliché: 'het hele assimileringsapparaat,' met de mainstream-journalistiek als disciplineringsorgaan van de neoliberale macht in 'Brussel,' en 'Washington,' en 'Wall Street.'

Everybody sees a difficulty in the question of relations between Arabs and Jews. But not everybody sees that there is no solution to this question. No solution! There is a gulf, and nothing can bridge it… We, as a nation, want this country to be ours; the Arabs, as a nation, want this country to be theirs.

Written statement (June 1919), as quoted in Time magazine (24 July 2006)

'We must do everything to ensure they [the Palestinians] never do return ... The old will die and the young will forget,' said David Ben-Gurion, the founder of Israel, in 1949.

Ramallah, May 17, 2014—Israeli forces killed two Palestinian teens during clashes on Thursday outside the occupied West Bank city of Ramallah.

Nadeem Siam Nawara, 17, and Mohammad Mahmoud Odeh Abu Daher, 16, were both fatally shot in the chest with live ammunition near Ofer military prison in the West Bank city of Beitunia. Both boys were transferred to the Palestine Medical Complex in Ramallah where they were later pronounced dead.

The boys were participating in a demonstration near Ofer military prison to mark Nakba Day and express solidarity with hunger striking prisoners currently held in administrative detention by Israel. The demonstration reportedly began peacefully and then turned violent when Israeli forces clashed with Palestinian youths, according to The New York Times.

'Israeli forces continue to use excessive force and recklessly fire live ammunition and rubber-coated metal bullets on unarmed protesters, including children, killing them with impunity,' said Rifat Kassis, executive director of DCI-Palestine. 'While Israel claims to open investigations into such incidents, they are not transparent or independent, and seldom result in a soldier being held accountable.'

Mohammad Abdullah Hussein al-Azzeh, 15, sustained a gunshot wound when he was hit with live ammunition in the back and left lung while taking part in the same demonstration. He is currently in stable condition at the Ramallah Medical Complex.

Palestinians across the occupied West Bank and Gaza Strip held marches on May 15 to commemorate the Nabka or 'catastrophe,' which marks the forced displacement and dispossession of the Palestinian homeland in 1948.

The use of live ammunition by soldiers on unarmed Palestinian civilians, including children, has been a recent area of concern to human rights groups. In February, Amnesty International released a report finding that the Israeli army uses reckless force throughout the West Bank.

An Israeli army spokesperson said that the killings were under investigation and claimed that only rubber-coated metal bullets, stun grenades and tear gas were used by Israeli forces at the time of the incident, not live ammunition, according to Haaretz.

The deaths on Thursday raise the number of Palestinian children killed by Israeli forces in 2014 to four, according to data collected by DCI-Palestine. Over 1,400 Palestinian children have been killed as a result of Israeli military and settler presence in the Occupied Palestinian Territory since 2000.

In March, Israeli forces shot and killed Yousef al-Shawamrah, 14, with live ammunition in the southern West Bank near his village of Deir al-Asal al-Fawqa. He was shot while looking for thistle in an area of land belonging to the village that now sits on the other side of Israel’s separation barrier. As he and two friends crossed through an open area, soldiers fired live ammunition toward the boys, hitting Yousef in the hip and back.

In December 2013, Wajih Wajdi al-Ramahi, 15, from Jalazoun refugee camp north of the West Bank city of Ramallah was fatally shot with live ammunition fired by an Israeli soldier. Documenting the killing, DCI-Palestine found that Wajih had been shot in the back from a distance of 150-200 meters (about 500 feet).

The Israeli military’s own regulations dictate that live ammunition must be used 'only under circumstances of real mortal danger,' but the regulations are not enforced and frequently ignored by Israeli soldiers, according to research by DCI-Palestine and a recent report by B’Tselem, an Israeli human rights group.

'The images captured on video show unlawful killings where neither child presented a direct and immediate threat to life at the time of their shooting,' said Rifat Kassis, executive director of DCI-Palestine. 'These acts by Israeli soldiers may amount to war crimes, and the Israeli authorities must conduct serious, impartial, and thorough investigations to hold the perpetrators accountable for their crimes.'

Hanan Ashrawi, who serves as a member of the PLO Executive Committee, released a statement on Tuesday condemning 'the deliberate execution of two Palestinian teenagers (Mohammad Mahmoud Odeh and Nadeem Siam Nawara) who were fatally shot with live ammunition outside Ofer Prison last week. Both boys were unarmed and posed no direct or immediate threat.'

'Israel’s use of excessive and indiscriminate violence and live ammunition at non-violent Palestinian demonstrations constitutes war crimes and crimes against humanity under international law.'

'Last week’s killings are part of a deliberate policy of escalation and of violence targeting Palestinian children. Israel’s actions, in addition, are in direct violation of the United Nations Convention on the Rights of the Child which Israel ratified in 1991.'

'We call on the United Nations, the European Union, and other members of the international community to take immediate action and adopt the necessary punitive measures and initiatives required to hold Israel accountable for the extrajudicial killing of Palestinian civilians, and for its use of live ammunition on Palestinian civilians, among other violations of international and humanitarian law,' concluded Dr. Ashrawi.

When your land has been occupied by a foreign army as long as your children have been alive, and this occupying army regularly brutalizes and humiliates the friends and relatives of these children, stopping kids from confronting the invaders is naturally going to be very difficult. Convincing the Israeli adults in control of this weaponry in civilian areas that they should not be using it to kill children who are merely stone throwers should not be difficult. The statistics sadly tell a different story, of a deep-rooted Israeli contempt for the lives of Palestinian children that should inspire Western outrage.

When Israelis are killed and injured by a Palestinian attack, the TV news networks are quick to cut to 'breaking news' reports. Harrowing footage from the scene and interviews with outraged Israeli government officials are swiftly broadcast, and harsh statements are quickly issued by government and UN officials to appear in tomorrow’s front page newspaper stories.

Meanwhile, the steady killing of Palestinian civilians, many of them children, by the Israeli occupation army goes largely unnoticed and unreported.

By consistently emphasizing the suffering of Israelis, and downplaying or ignoring the killings of Palestinians, the media convey a false impression that Palestinian 'attacks' are the principal feature of the conflict.

Statistics unambiguously clarify that this impression is the exact opposite of the reality on the ground. A total of 1,926 Palestinians have been killed from 29 September 2000 up to 8 December 2002, and more than 21,000 injured. 669 of these killings occurred since Israel’s total reoccupation of the West Bank began last March, according to the Palestinian Red Crescent Society.

EI looked at the one-month period from 31 October to 2 December 2002 in detail.

According to our research, forty-three Palestinian civilians were killed during this period and dozens wounded or permanently maimed.

Fifteen of those killed and several dozen of those injured were children. A summary of the circumstances of the killing and injury of this group appears below.

Details and circumstances of Palestinian children killed by Israeli occupation forces, 31 October to 2 December 2002

December 2:

Jenin: Mutaz Odeh, 18, died of a gunshot wound to the heart when Israeli occupation forces opened fire on a group of civilians who were stoning Israeli tanks and armored vehicles. 21 others injured, two seriously. (PCHR, LAW)

Hebron: Abbas al-Atrash, 3, was in his house, when he was killed by bullets fired by Israeli occupation forces. Doctors said that he was hit by a bullet in the abdomen as he stood at the window. The occupation army claimed the toddler was killed by shrapnel from an explosive device thrown at its forces. No occupation forces were injured by the alleged bomb. (Agencies)

November 25:

Nablus: Jihad Al-Faqih, 8, was shot and killed by Israeli occupation forces with a bullet to the heart. The killing occurred as many Palestinians decided to ignore the permanent curfew imposed on the city and go to school or work. Some unarmed Palestinians confronted the occupation forces who were in tanks and armored vehicles, and some people stoned them. The occupation forces opened fire on the civilians, killing Jihad, who was not among the stone throwers. 13 others were injured by the soldiers, including 7 other children and two women. (LAW, Agencies)

November 22:

Jenin: Muhammad Bilalweh, 12, was shot dead by Israeli occupation forces with a bullet to the left eye. The occupation forces opened fire on a group of children who began stoning them after an Israeli armored bulldozer had demolished a building that was home to six families. Earlier the army had entered the camp in force, firing indiscriminately. Three other children suffered serious injuries from gunshots and shrapnel. (LAW, Agencies)

November 19:

Tulkarm: Ehab Alam al-Zalqa, 16, was shot and killed by a member of an Israeli death squad disguised as a Palestinian. The killing occurred when the death squad, who had been spotted by civilians, was stoned. After killing Alam, the death squad caught and executed on the spot the person they were hunting after confirming his identity. Two other civilians were killed by the death squad, and ten others, including five children injured. (PCHR, LAW)

November 20:

Tulkarm: Amr al-Qudsi, 14, was shot dead by an Israeli soldier with a gunshot to the back. Following an earlier incident, in which an Israeli death squad killed four people in the town, a group of children gathered and stoned an Israeli jeep. The jeep stopped, a soldier got out, took aim at Amr, and killed him. (LAW, Agencies)

November 16:

Jenin Refugee Camp: Ibrahim al-Sadi, 17, was shot and killed by Israeli occupation forces. Israel surrounded a number of houses in the center of the refugee camp, including the house of Sheikh Bassam Ragheb al-Sa’di, wanted by Israel for alleged activities in Islamic Jihad. Israeli soldiers noticed al-Sadi’s son Ibrahim, 17, passing near a house with a gun in his hands. Immediately, they fired at him without warning. He was killed by a live bullet in the chest. According to eyewitnesses, the son passed by the area accidentally and he did not fire at the Israeli soldiers, rather he was trying to get away from them. Ibrahim’s brother, Abdulkarim, had been killed by Israeli occupation forces on September 5. (PCHR)

November 15:

Nablus: Imran al-Shila, 15, was killed by a bullet to the chest by Israeli occupation forces who opened fire on a group of children who threw stones at them in the Old City. (LAW)

November 14:

Nablus: Jalal Awijan, 17, was killed by a gunshot wound to the chest, when Israeli occupation forces in tanks and armored vehicles opened fire on a group of school children. (LAW)

November 13:

Rafah, Gaza: Hamed Asad Hassan al-Masri, 2, was killed by a live bullet to the chest. That evening, Israeli occupation forces began shelling Block J in Rafah refugee camp, forcing the little boy’s family to flee their home. As they left the house, Hamed was hit by a bullet fired by the occupation firces. His mother, Asmaa, 31, was critically injured by live ammunition and shrapnel to the abdomen, pelvis and limbs. (PCHR)

November 11:

Rafah, Gaza: Nafez Mishal, 2, was shot by Israeli occupation forces who opened fire on civilian homes in the Tel al Sultan neighborhood of the refugee camp. He died two hours later of a gunshot wound to the abdomen. Nafez had been sitting on his father’s lap playing with a balloon, when the balloon escaped. The toddler got up to run after it and was then cut down by a volley of bullets from an occupation army watch tower. The occupation army claimed it was “returning fire,” although all witnesses said that the soldiers had, as they often do, opened fire without provocation. Two other children, aged 9 and 14 were injured in the same incident (The Independent, PCHR)

November 11:

Rafah, Gaza: Muhammad Rifat Abu al-Naja, 9, died of wounds he sustained the previous month. Abu al-Naja was seriously wounded when Israeli forces at the Egyptian border, south of Rafah, shelled Palestinian houses in Block O in Rafah refugee camp on 17 October 2002. Six Palestinian civilians, including 3 children and 2 women, were killed in that incident, and more than 40 others, including Abu al-Naja, were wounded. (PCHR)

November 5:

Rafah, Gaza: Adham Ibrahim Hamdan, 16, shot by live bullets in the head and Eyad Nafez Abu Taha, 17, shot by a live bullet in the head. The two boys were killed by Israeli occupation forces who had invaded Block L of Rafah refugee camp, demolished three houses, and fired indiscriminately at civilians. 12 Palestinian civilians, including 4 children under the age of 18, were wounded. (PCHR)

LYNN FRIES: Welcome to The Real News Network. I'm Lynn Fries reporting from Paris. In this program, we look into the history of income and wealth from the 18th century. Who owns what and who earns what? For centuries this has been a debate without much data but that's changed with the publication of a new book. To discuss all this The Real News visited Thomas Piketty in Paris. Thomas Piketty is Professor of Economics at the Paris School of Economics and the author of this new book,Capital in the Twenty-First Century. Welcome Thomas. Thank you.

THOMAS PIKETTY: Thank you

FRIES: So you've assembled a huge amount of data and then you wrote a huge book about it. So tell us your objectives

PIKETTY: OK. So the objective of this book is really to provide the readers with a lot of historical evidence on income and wealth. And this comes from a collective research project that involves over 20 other scholars including Tony Atkinson, Emanuel Saez, Facundo Alvaredo and we have been collecting over the past 15 years the largest existing historical database on income and wealth inequality. And the primary objective of this book is to put all this data in a consistent manner so that everybody can access the documentation. And I draw some conclusions about the future at the end of the book but most of all the book is really about the history of income and wealth so that, to help everybody to draw their own conclusion

FRIES: With three centuries of data, you're saying that the Old World countries of Europe and Japan are back to 19th century levels of wealth inequality. So tell us about that and why it matters for the entire world and especially people born in 1970 or later.

PIKETTY: Well I guess I have particular sympathy for people born in the 1970s and for them wealth is going to have a different structure than for the baby boom core. Namely we see in recent decades a return of the relative importance of wealth as compared to income which we didn't have for the baby boom core. And the reason is that until WWI we lived in societies that I call in the book patrimonial societies, where the total quantity of wealth was very large with respect to income. So typically the ratio of total wealth to income was about six to seven years. Then this dropped tremendously to about two/three years in the 1950s and this has been going upward again particularly in European countries and in Japan back to five/six years of national income today. And what this means is that for the post war baby boom core there was relatively little to inherit from the past.This was because of the destruction, the inflation and taxation due to the financing of the war which reduced the quantity of private wealth that was to be transmitted in the '50s,'60s. Now we are back a relative importance of wealth that is going in the direction of pre World War I societies with lower concentration of wealth. You know, it's important to emphasize that today there is a middle class in wealth that did not exist one century ago. So having a lot of wealth per se is certainly not bad. If you have the middle class and if you have an equal sharing or at least a spreading of wealth then it is better to have more wealth than to have only debt. So it's all a matter of whether we manage to make the middle class in wealth expand rather than shrinking which is what we've had unfortunately in the recent decades.

FRIES: So let's talk now about income inequality in the New World, the United States. An important study was done in US income inequality by Simon Kuznets in the 20th century. Tell us about his work and put it in historic context..

PIKETTY: OK. So in the 1950s, Kuznets was the first economist to produce an income inequality series. And what he found was a decline in income inequality in the United States between 1913 and 1948. Now in fact it was largely due to the Great Depression, to World War II, wage compression during World War II, taxation policy that was enacted after the Great Depression. And Kuznets himself was very much aware of that but people in the '50s and '60s in the Cold War and post colonial context wanted to believe in a happy story and a happy end about inequality and capitalism. And Kuznets somehow proposed such a story by saying OK maybe there are universal and natural reason why inequality could reduce in the advanced stages of economic development. You know himself, he was not really very convinced about it and indeed what we've seen then is a return of very large inequality of income in the United States, And I guess what's new in this book is that we are able to extend the work of Kuznets to many more countries and to much long time period. And this allows us to realize that this optimistic belief in the Kuznets curve in the 1950s, 60s, 70s was really due to in fact to very special circumstances.

FRIES: And other optimistic beliefs? You've said that the Golden Age post war meritocracies were built on transitory illusions. Tell us about that.

PIKETTY: I think in the '50s, '60s, '70s we sort of invented a number of fairy tales or nice stories as to why the world is now different. Inequality has nothing to do with 19th century inequality. Now the two main illusions, I think are the human capital illusion and the war of ages illusion. And I should say that as all good illusions, they are partly true but they are just much less true than what people believe and what a number of people still believe.

So the human capital illusion is saying that now with the modern economy all that matters is human capital. And education, personal skills, personal talent, as opposed to traditional forms of non-human capital  financial, real estate, etc. Now this is an illusion because in fact in the long run you have a rise of both human and non-human capital in comparable proportions. So of course you have a rise of human capital. You have more education and higher level of human skills today. But you also have a higher level of real estate, equipment, patents, robots and other non-human assets. So that in the long run, you know I'm not saying that robots will dominate humans but I'm just saying that the balance between human capital and non-human capital has no reason to move in the direction of human labor. And indeed, if we look at the recent trends, you know the capital share in GDP has actually been going up and the labor share, for the share of income going to labor earners in the form of wages or other forms of compensations for labor, has actually been reduced. And I'm not saying it's going to reduce forever but it can very well stabilize at a level that is not so different from the 19th century. So in other words, the capital labor split today is not that different from the 19th century. And it would be wrong to assume, and this has been an illusion to assume, that technological change alone and modernity alone in the form of technical change would make the triumph of labor over capital, and the triumph of human capital. So this is the first illusion.

The second illusion is different. The war of ages illusion relies on the idea that with aging and with the increase in life expectancy, the whole nature of capital accumulation has changed entirely and now its mostly life cycle accumulation. So you accumulate for your old age and then when you are old you consume some of your capital. So you still have a lot of capital but it's not really inequality because it's just everybody is going to be young and then old and so there's no problem. It's just a way, capital is just a way of shifting puchasing power later in life. Now unfortunately, this is largely an illusion in the sense that the share of wealth accumulation that has to do with a pension has certainly not become 100%. It has not even become 50%. It has not become less than 20% of total wealth accumulation in every country. And even in the countries where this life cycle wealth acccumulation including pension funds is up to 20% or 25% ,you know, the concentration of this wealth within age groups is quite large. And overall if you take the 100% of wealth accumulation what we observe in the data is that inequality of wealth within each age group, so within people with the same age  40 to 49, 50 to 59, 30 to 39, 70 etc - is actually almost as large as the total inequality of wealth over the entire population. So this is really an illusion to imagine that because people live longer the inequality of wealth has completely changed the very nature of capital.

So I think it's really time to reopen these debates. Some of these illusions could have been right. And to some extent there's some element of truth in them but it's important to put them under examination. To look at them in a very careful way and I think to conclude that they are partly illusion.

FRIES: To sum up the ground covered so far, talk specifically about these two distinct patterns you find in your study - one for income, the other for wealth  and then get into what all this means for the 21st century.

PIKETTY: The main evolution that I study in the book are two important U-shaped patterns One is for the share of total income going to the top income earners. And we've seen the reduction of the share during the war period and then a large increase particularly in the United States since the 1970s and this is largely due to the rise of top managerial compensation in the US. Now the other U shaped pattern which in my view is even more important in the long run is the evolution of the total quantity of wealth with respect to income. And what we've seen particulary in European countries & in Japan is that the total quantity of wealth was very large up until WWI around six-seven years of income. It dropped to two-three years of income in the 1950s and then it has been increasing since then. And it is now back to levels that are almost as large as prior to WWI. Which is not necessarily bad in itself if people have equal share in this large stock of wealth. Now the problem is that in practice the inequality of wealth tends to be much larger than the inequality of labor income. So this return of wealth also implies to some extent a return of inequality. But we can do better. We can try to have, of course there's still this large quantity of wealth but with a more equal distribution and higher wealth mobility and higher access to wealth for people who start with low income.

FRIES: Before getting into how we can do better, talk about what would be reasonable to expect if instead, capitalism was just left to itself.Of these two patterns, you say that even if we get income inequality, get wage inequality under control, what most concerns you is wealth inequality. If we don't get that under control, we're headed to levels like in the 19th century or worse. So talk to us about the dynamics of the future accumulation of wealth. And what's behind it, what's pushing us in that direction.

PIKETTY: I think the main force that can push the long run towards very high concentration of wealth is the tendency for the rate of return to capital to be higher than the growth rate. Which I note r bigger than g in my book. And which until the 19th century and until World War I this was pretty obvious to everybody that r was bigger than g. People will not formulate it this way but in fact it was obvious because the growth rate was very small. Certainly in agragian societies the growth rate was close to 0%. Then with the industrial revolution it increased up to 1% to 1.5% but with a rate of return to capital of at least 4% to 5%. And sometime even more for more risky assets. Then the gap between the rate of return and the growth rate was very large indeed up until World War I. And what historical investigation suggests is that this was the primary explanation for the very large concentration of wealth and so in spite of the fact that there had been a complete change in the nature of wealth between the 18th century and 1910. You know in 1910 land does really matter any more. It's only in Downton Abbey that you have a lot of land but in the real world land was less than 5% of national wealth in the UK or in France in 1910. But the concentration of wealth, although wealth took new forms - financial assets, international investments, industrial capital, real estate - the concentration of this wealth was as large or even a bit larger than the concentration of land in the 18th century. And the primary explanation for this, according to my investigation, is this tendency of rate of return to be bigger than the growth rate. And there is a serious possibility that we'll be back with this tendency in the future. Primarily because the growth rate in the future, in particular, the population growth rate is apparently going to decline according to demographic projections. And also the productivity growth rate, which was very large in the post war period - '50s, 60s, 70s - as some countries were catching up from the war destruction and the growth rates that were 4% to 5% in Europe and Japan during that time are now for the past 30 years they have been down to 1% to 1.5% in productivity growth terms. And you know it could well be that this is the kind of growth rate that we have in the future. In which case, the rate of return to capital especially given international competition and increased bargaining power for capital on earth, the gap between the rate of return to capital and the growth rate will be high again in the future. And you know during the 20th century there were a number of unusual circumstances that changed entirely the equilibrium between r and g; a big decline in r on the rate of return due to the destruction, inflation, taxation; a big increase in g the growth rate in the post war period because of the recovery and also because of the large population growth. It's important to have in mind that half of total GDP growth during the 20th century was actually the growth of population. And this apparently is now over. So I am not saying I am able to predict the future value of growth rate and rate of return. There are many different processes  social, demographic, economic, political, financial  that are going on.What I am saying is that it would be a mistake just to rely on natural forces for the rate of return and the growth rate to equilibrate each other. You know there's no reason, there's no logical reason, there's no historical reason why growth rate should be as large as the rate of return. So it could be that the growth rates are suddenly going to be 4% or 5% percent per year in the future. And it could be that we all have a lot of children and we all make a lot of inventions each year so that the growth rate is 4% or 5%. And maybe one day we'll discover a planet where the growth rate is 10% forever. But you know, I think it would be a mistake to bet on that. And I think we should have another plan in case this incredible coincidence with the growth rate as large as the rate of return happens you know in case it does not happen and in case the growth rate is closer to 1% to 2% in the long run. Then we should have another plan. And we should try to set up institutions  fiscal institutions, educational institutions  that allow us to spread the wealth and that allow us to have a balanced distribution of income and wealth in the long run.

FRIES: So you put three centuries of data into the public domain, so now everybody has access to the history of income and wealth and can draw their own conclusions. But what are your conclusions? What are the lessons so today democratizing wealth can be less violent and more durable?

PIKETTY: I think one of the main lessons of the 20th century is that indeed wars and big shocks played a large role in the reduction in inequality and that we ought to do better for the future and actually we can do better. There are much more pacific ways of course to redistribute wealth but we need to think harder about it. So we need to rethink entirely the issue of progressive taxation. Progressive taxation of income and of inheritance was invented in the 20th century but somehow at the end of the 20th century it was abandoned. I think largely for bad reasons. So we need to rethink that again. And also we need to analyse new forms of progressive taxation in particular progressive taxation of wealth. I think it is important to realize that wealth is going to be increasingly important as compared to income in the 21st century. Therefore the taxation of wealth is going to be more and more important as compared with the taxation of income. We need both, of course, but we need to rethink the taxation of wealth. In most developed countries the way we tax wealth right now is through property taxes. So for instance in the US or in most European countries you tax real estate property just in proportion to their value. So it's not progressive and also because these property taxes were set up in the 19th century, they do not really take into account financial assets or financial liabilities. So I think it would be important to adapt them to the structure of wealth in the 21st century. And it will be adequate to transform these property taxes into progessive taxation of net wealth. So for instance, if you have a house worth $500,000 and you have a mortgage of $490,000 your net wealth is only $10,000. You are not rich in any way. So in the current property tax system you shouldn't pay as much property tax as someone without a mortgage. And sometimes you even have people whose property value is below their mortgage and they keep paying the same property tax. So I think this is just not the right way to tax wealth. And both to allow people to access wealth, to accumulate wealth and also to limit the concentration of wealth at the top end of the distribution, we need to have a progressive tax on net wealth.Where you would have a much lower rate for people who are trying to access wealth, for the bottom 90% of the population, and a graduated increasing rate for people who already have millions or billions of wealth. And the objective is not to tax more wealth overall. It's actually to keep the same quantity of wealth but to spread it more and to increase the mobility of wealth in society.

FRIES: And so why is transparency so integral to your policy recommendations for taxing wealth?

PIKETTY: To me transparency in wealth is really the key objective because I think it's very difficult to have a serious democratic debate and a rational democratic debate with so little hard information on wealth dynamics and with so little public knowledge on who owns what where. And I think to me the primary objective of taxation is actually to produce more transparency. And it's important to realize that historically taxation has always been more than taxation. It's also a way to produce legal categories, to produce democratic accountability. So for instance when there was no corporate income tax there was no corporate accounts. You could not even know what the profits of a company were. So it's not that today's accounts are always perfectly transparent but at least they exist. And it will mean the same for wealth. I think if we, in order to have a proper wealth tax we will need a more serious fight against tax havens. More automatic transmission of information from banks to each country's government so that we know who owns what where. We will need to go toward a global registry of financial assets so that we have a much better knowledge of cross border assets than we have now. And then we will see with this transparency our democratic institutions will be better able to decide which tax rate should be adopted. And you know I don't pretend that I have the perfect mathematical formula to choose the tax rate. I'm just saying if the top of the wealth distribution is rising three times as fast as the size of the economy which is what the data we have on wealth tends to indicate. So for instance, all the Forbes ranking data suggests that the top of the wealth distribution is rising at 6%to 7% per year not only in the US but also in Europe and also at the world level whereas the average wealth at the world level is rising at only 2% per year. The top is rising three times as fast as the average then you cannot say that a 1% tax rate or a 2% tax rate at the very top is going to kill the economy. This is not serious. Now if the data shows differently you know maybe one day when we have better transparency on wealth we will see that the top wealth group actually do not rise faster than the average then they will not need to have steeply progressive taxation. So you know we can adapt our policy to what we see. And you know I think this is what democracy is all about. We need information. We need transparency in order to have a serious democratic debate on the basis of good information.

FRIES: Talk more about the structure of capital in the 21st century in this rethink about wealth tax.

PIKETTY: The 21st century is characterized by similar kind of patimonial structure of the 19th century but with different types of assets and different types of wealth. So the kind property taxation system that was set up in the 19th century is not enough for the 21st century. First because it was not progressive.It was proportional because it was societies that were actually based on very large inequality of wealth and sometime they were not even using universal suffrage.You know this was really a different approach to progressivity. And also these property taxes of the 19th century were not taking into account financial assets, financial liabilies which are so important today. So today a big part of the wealth of course is financial and involves international financial assets. So this is why we need to rethink the taxation of wealth in this high financial wealth world. And this requires international cooperation. Now the US is one quarter of world GDP, the EU is another quarter of world GDP, China will soon be about almost one quarter of world GDP and you know each of these areas has problems with rising concentration of wealth. So, so far China or Russia for that matter are sort of treating their wealthy oligarchs on a case by case basis. Which I think they are starting to realize particularly in China that they ought to do it in a better way. And that property taxation, taxation of wealth is already being seriously debated in China and it could be they make progress faster than Europe or the United States. You know, we will see but all the areas of the world will have to try to adapt their view of taxation and their consideration for a wealth tax to a world of very high wealth to income ratio and very large cross border assets and financial wealth.

FRIES: And why do you find there's so much to learn about capitalism in the 21st century from your study of the period before the First World War?

PIKETTY: There is a lot to learn from the study of 1900, 1910 not because we are going to go for another World War I, but because this was a time where you had at the same time a lot of innovation going on and at the same time a lot of inequality, you know very high concentration of wealth. And it is important to realize that the two can go together because even when you have a lot of innovation the growth rate is not sufficiently large to compensate for the rate of return and to undue this very large concentration of wealth. And some people, I have read some reviews where people are saying well we do not care about the past or the future will be different. We will have a lot of innovation and the growth rate will be 4% or 5% per year. You know I think 1900, 1910 these are not agrarian economies.This is a time where we actually invented the automobile, the electricity, the radio. So maybe it is less important than Facebook but still these are important innovations. And I think it would be wrong to imagine that there is nothing to learn from studying this time period. There were a lot of innovations but still the growth rate was 1% to 1.5% per year. And this was not sufficient to spread the wealth as compared to the forces going in the direction of very large concentration of wealth. So large that this was threat for the proper working of our democratic institution and it could again be so in the future.

FRIES: And your concluding thoughts?

PIKETTY: You know, the concluding thought of my story is that.technological rationality does not lead to a democratic rationality. So the market and private property should be the slave of democracy rather than the opposite. So we want to use the market system, the price system, the property system so as to make sure that everybody will benefit from prosperity, will benefit from income and wealth.But for this to happen we need very strong democratic institutions, very strong fiscal institutions, a very strong and inclusive education system. You know that's not going to happen just by relying on technological forces and market forces. So we really, the lessons of history are very important for that. For a long time, the agenda was set by a number of people arguing that all we need is market competition. Or the book by Milton Friedman in the 1960s argued that all that we need basically is a good Federal Reserve, we don't need a welfare state, we don't need progressive taxation, with a good Federal Reserve that's enough. I think to a large extent, we still live in this legacy today. We still believe that since 2008 basically that creative monetary policy and a good action by central banks is going to be enough. That's not going to be enough. We need a good central bank. We need a good Federal Reserve but that's not enough. We also need progressive taxation, we also need a welfare state, we need education. We need new forms of progessive taxation. I think we've been asking too much to creative monetary policy in the past five years. You know that's not going to solve all of our problems. And sometimes it is creating bubbles. It is creating huge profits for certain people and a huge loss for others. You know taxation is more complicated than money creation because you need the Parliament to vote for the tax base. You need to enforce the tax law. That's more complicated but at least we know who pays what. Whereas when you create billions of dollars or billions of euros everyday sometimes you do not know what you are doing with them. We need to rethink these institutions and what they have brought us in the past and what we need for the future in a new light

FRIES: Thomas Piketty, thank you

PIKETTY: Thank you so much.

FRIES: And thank you for joining us on The Real News Network.

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